KOTA KINABALU: The Royal Institution of Surveyors Malaysia (RISM) Sabah Branch yesterday expressed support for maintaining the 999-year lease term when such leases are surrendered for sub-division in the course of development.
Its chairman Liaw Lam Thye said maintaining the status quo on the term of the original lease would give comfort to many landowners who are contemplating sub-dividing their land for development.
“They will not have to worry that they will be granted with a shorter term lease when their land is put up for development,” he said in a statement here yesterday, in response to Chief Minister Datuk Seri Musa Haji Aman’s recent remarks on the issue.
Musa had indicated that he would discuss with the Cabinet the possibilities of retaining the 999-year lease.
Liaw said the indication that the government was considering to maintain the term was good news to landowners and investors, many of whom are not necessarily owners of huge pieces of land.
He said some small landowners may want to sub-divide their 999-year lease land among the family members, but they were often apprehensive about the threat of a term to be changed to 99-year in return, and this has created difficulties in sub-dividing the land within the family.
“However, if the status quo of the lease term is maintained, landowners would have the comfort of knowing that they will get back the same lease term whenever they surrender their land for sub-division,” he added.
He noted that land values have soared significantly over the past two years due to the buoyant local economic condition, and owners of 99-year lease often worry about the premium they have to pay for lease extension upon the expiry of their leases.
On average, a 99-year lease will need to be renewed every two or three generations and the premium charged for lease extension is tied to land value.
“Market perception towards the 999-year leases is generally more favoured than the 99-year leases, and purchasers and investors are willing to pay a premium for a 999-year lease.
“It is noted that freehold properties in Peninsular Malaysia and the United Kingdom always remain freehold even after subdivision, being developed or changed for other use. Practically, a 999-year lease is equivalent to a lease held in perpetuity,” he added.